Going amiss with property descriptions: part one
Why am I writing about an Act (the Property Misdescriptions Act 1991) that was repealed on 1 October last year? It’s not quite as daft as it sounds. Although the Consumer Protection from Unfair Trading Regulations 2008 has effectively taken over, the original Act is still of interest – particularly if you’re involved in property development. Follow its precepts, and you’ll be far less likely to commit an offence under the current legislation.
What’s an offence under the Act?
It all revolves around making ‘a false or misleading statement’. ‘Statement’ in this context covers a multitude of modes of communication: verbal, written, pictures and photographs, plans, models, websites, and any other method of signifying meaning. That’s pretty much everything then.
Three other points of note regarding such statements:
1 they’re misleading if they convey a false impression to a reasonable person;
2 they have to be made in the context of a ‘property development business’; and
3 the good news: they cannot be solely responsible for making a contract void or unenforceable.
What are the penalties for offences under the Act?
The bad news is that there’s a maximum fine of £5,000 per offence in Magistrates Court; the even worse news is the fines are unlimited in Crown Court. Moreover, Trading Standards Officers can carry out on-the-spot checks if they have reason to believe an offence has been committed. This is yet another reason to keep your nose – or, in this case, language – clean.
What’s a valid defence under the Act?
There’s only one: due diligence. The onus will be on you to demonstrate that you took all reasonable steps and exercised all due diligence to avoid committing the offence. In addition, you cannot rely on information provided by someone else, unless that information has been verified in a reasonable way and there is no reason to disbelieve it.
What are the time limits for prosecution?
You can’t be prosecuted after either three years since the commission of the offence or one year since the date of discovery of the offence – whichever is earlier.
What powers of enforcement apply?
The legal authorities can require you to produce your books and documents. Additionally, they have the right to enter your premises in order to ascertain whether you’ve committed an offence, and to seize and detain goods.
How can you avoid falling foul of the Act?
As Voltaire once remarked: ‘Common sense is not so common’. Apply it here in the shape of these seven safeguards and you shouldn’t go far wrong:
1 Institute a peer review system whereby all sales and marketing literature is checked by more than one person.
2 Consider the use of descriptive phrases and what they may mean to the average consumer.
3 Ensure an appropriate person both deals with enquiries and records the main points of the conversation.
4 Check and obtain copies of all available information.
5 Undertake random double-checking of particulars against the actual property.
6 Update all information regularly.
7 Always act honestly and in good faith
What else can you do?
Here are some useful hints and guidance, arranged alphabetically.
Communal areas and parking
Check the legal documents rather than relying on assumptions about rights and ownership.
Include these in the interests of clarity and common understanding.
The Act neither allows nor prohibits the use of these; however, to be effective, they will need to be both bold and precise. Blanket disclaimers about the accuracy of the information provided are unlikely to be acceptable – ever.
Take a 360 degree approach, and mention both the positives and the negatives on all sides of a property. To do anything else is misleading.
Extensions and loft conversions
Use extreme care when describing these, unless you have seen all relevant planning documents outlining their use.
Emphasise attractive features by all means, as long as you do not give an overall misleading impression of a property.
Be specific: give the correct postal address and exact distances from local amenities. Avoid estimated journey times and phrases such as ‘close to’ and ‘within easy access’.
Invest in a laser measure to ensure accuracy, and re-calibrate regularly.
Avoid extreme lenses, photo editing software and airbrushing.
In the context of second-hand and commercial properties, be careful not to make misleading statements about price reductions. Our [?] ‘Pricing Practices Guide’ provides helpful details about advertising reductions.
Check, double-check and provide evidence.
And there you have it: what you need to know to keep you out of trouble in relation to property misdescriptions – part one. Next time, I’ll be tackling part two by taking a look at the new kid on the block: the Consumer Protection from Unfair Trading Regulations 2008. If you have any questions or comments in the meantime, I’d love to hear from you: just use the form below.
Prince Evans Solicitors